financial management overview4

financial management overview4 - i . Which of the following...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
i . Which of the following statements is most correct? a. A good goal for a corporate manager is maximization of expected EPS. b. Most business in the U.S. is conducted by corporations; corporations’ popularity results primarily from their favorable tax treatment. c. A good example of an agency relationship is the one between stockholders and managers. d. Corporations and partnerships have an advantage over proprietorships because a sole proprietor is subject to unlimited liability, but investors in the other types of businesses are not. e. Firms in highly competitive industries find it easier to exercise “social responsibility” than do firms in oligopolistic industries. Miscellaneous concepts Answer: e Diff: E ii . Which of the following statements is most correct? a. One advantage of organizing your business as a corporation is that your shareholders are not subject to limited liability. b. Restrictive covenants in debt agreements are an effective way to reduce agency conflicts between stockholders and managers. c. Managers generally welcome hostile takeovers since they often increase the company’s stock price. d. Statements a and b are correct.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 4

financial management overview4 - i . Which of the following...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online